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Today I will take a look at Yes Bank Limited’s (NSEI:YESBANK) most recent earnings update (31 March 2018) and compare these latest figures against its performance over the past few years, as well as how the rest of the banks industry performed. As an investor, I find it beneficial to assess YESBANK’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. View our latest analysis for Yes Bank
How YESBANK fared against its long-term earnings performance and its industry
For the purpose of this commentary, I like to use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This enables me to assess various companies on a similar basis, using new information. For Yes Bank, its latest trailing-twelve-month earnings is ₹42.33B, which, against the prior year’s level, has risen by 26.75%. Since these values are fairly short-term thinking, I have created an annualized five-year figure for YESBANK’s net income, which stands at ₹17.89B This shows that, on average, Yes Bank has been able to gradually grow its profits over the last few years as well.
What’s enabled this growth? Well, let’s take a look at if it is solely due to an industry uplift, or if Yes Bank has seen some company-specific growth. The hike in earnings seems to be propelled by a robust top-line increase outpacing its growth rate of costs. Though this has caused a margin contraction, it has made Yes Bank more profitable. Inspecting growth from a sector-level, the IN banks industry has been growing, albeit, at a muted single-digit rate of 7.91% in the previous year, and a substantial 11.13% over the past five. This shows that whatever tailwind the industry is profiting from, Yes Bank is able to leverage this to its advantage.
What does this mean?
Yes Bank’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Yes Bank gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Yes Bank to get a more holistic view of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for YESBANK’s future growth? Take a look at our free research report of analyst consensus for YESBANK’s outlook.
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Financial Health: Is YESBANK’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
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Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.